Dec 6, 2022 - Economy & Business
The big split emerging in the economy
There's a growing split between two major segments of the economy: manufacturing and services.
What's happening: Economic activity in the service sector grew in November, slightly above analysts' expectations, per the Institute for Supply Management's latest survey of activity at these businesses — which includes companies in retail, health care and transportation.
- That's a sharp contrast to ISM's manufacturing index, which contracted in November.
The big picture: Manufacturing is more sensitive to financial conditions, wrote Pantheon Macroeconomics in a note Monday. Plus, people are now spending less money on goods and more on experiences.
- Folks are drawing down savings accumulated over the past two years. "That should keep service sector growth in the black for now," according to Pantheon.